The paper "The Federal Reserve in the United States" is a wonderful example of a report on macro and microeconomics. The Federal Reserve is a system that is found in the United States. It can also be referred to as the central bank of the United States. Research shows that this system was started in the year 1913. It is actually partly government and partly privately based. The Federal Reserve has got various functions. One of the major reasons why this bank was created is because it had to address any panic amongst banks in the United States.
The Federal Reserve also has to help in balancing among government’ s centralized responsibility and banks’ private interests. (Epstein, 2003) This includes regulating and supervising the banks in the United States. The Fed is also responsible for managing the monetary policy. This is in relation to the supply of money within the nation. All these are carried out to ensure that there is maximum employment, the prices are stable and the interest rates are quite moderate and long term. As illustrated, the Federal Reserve has the responsibility of maintaining and ensuring that there is maximum employment in the United States.
The Federal Reserve is also at the same time expected to keep inflation low in the nation. This is a very challenging task that needs skilled labor. One of the tools that the Federal Reserve uses to carry out its responsibilities is maintaining or changing the interest rates. When there are low-interest rates in the market, there results in more money circulating among people. This is due to the fact that low-interest rates make it very cheap for people to acquire money.
This situation can lead to economic development in the nation. This is due to the fact that people tend to spend more when they get more. This means that as people get more money they will automatically look for something to purchase using that cash. Though this may indicate development, it can also lead to some multiple problems if it is not controlled.